Amazon orders 20K vans for last-mile delivery program

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Dive Brief:

Amazon ordered 20,000 vans from Mercedes-Benz as part of a last-mile initiative announced in June, which will recruit entrepreneurs and small businesses to deliver packages for the e-commerce giant. Amazon originally anticipated it would order 4,500 vans.

Since announcing the delivery program, Amazon has received 10,000 applicants to deliver packages, The Seattle Times reported. "Thanks to the tremendous response ... we are excited to increase our original order of branded Sprinter vans to 20,000 vehicles," Dave Clark, Amazon's senior vice president of worldwide operations, said in a press release.

The van order coincides with Mercedes-Benz Vans opening a new Sprinter plant in Charleston, South Carolina.

Dive Insight:

Amazon has received thousands of applicants since the program's announcement — so much so, that it more than quadrupled its original order of branded delivery vans.

While the e-commerce giant hasn't disclosed how many of those applicants are vetted or will ultimately be selected to deliver parcels, the numbers do show the potential success of Amazon's program in controlling some of its last-mile logistics and decreasing its reliance on UPS and FedEx.

Amazon's announcement in June sent UPS and FedEx stocks tumbling, as investors worried how the e-commerce giant's move into last-mile delivery could affect established third-party logistics providers. Many analysts, however, said the market was overreacting, and Amazon, while introducing some competition, didn't pose a significant threat to third-party logistics providers' (3PLs) businesses.

While 20,000 vans is a significant jump from Amazon's originally anticipated order of 4,500, it still pales in comparison to the fleets of established 3PLs. UPS says it has 119,000 "package cars, vans, tractors, motorcycles" in its package delivery fleet. FedEx Ground uses more than 60,000 vehicles to move an average of 8 million packages daily.

In addition, Amazon will not own the vans, but rather "small business owners will work with third-party fleet management companies to procure their customized vans," a press release stated.

Some in the industry expressed disappointment that Amazon's order is for 20,000 diesel vans — not a single electric vehicle.

"How many tons of emissions will these vans generate over the next 5 years? What happened to corporate social responsibility at Amazon?" Marshall Towe, an entrepreneur and board advisor, wrote in a LinkedIn post.

Both UPS and FedEx have made strides toward more environmentally friendly vehicles in their fleets. UPS said its current fleet includes "more than 9,300 alternative fuel and advanced technology vehicles." It ordered nearly 1,000 electric delivery trucks earlier this year and invested millions of dollars in compressed natural gas (CNG) trucks. FedEx has also deployed electric vehicles and is testing hydrogen fuel cell vans to make deliveries.

"The opportunity is NOW to make the move to the future," James Silk, a project manager for the State of Washington, replied to Towe's post. "If anyone can be the trendsetter it is Amazon."